Must-Know Facts About Starting a Business on an H-1B Visa
Breaking Update: A new policy under the Trump administration has introduced a $100,000 filing fee for new H-1B petitions. Exemptions apply, so it is critical to understand how these changes may affect you. At Green Card Link, its immigration attorneys explain the latest updates and provide strategies for navigating the new requirements.
Many foreign professionals wonder: Can an H-1B visa holder start a business in the United States? The answer is yes, but the process is complex and subject to heightened scrutiny by U.S. Citizenship and Immigration Services (USCIS).
While H-1B visa holders may own and control a business, the company must still have the independent ability to direct their employment. This often requires establishing a board of directors or involving other investors with the authority to hire, fire, pay, and oversee the founder’s role as an employee.
Because the H-1B is one of the most versatile and in-demand work visas, USCIS enforces strict requirements to prevent misuse. If you are considering entrepreneurship while on an H-1B, it is important to understand the rules, risks, and legal strategies to protect your immigration status.
How to Start a Business on H-1B Status
Starting a company on an H-1B visa follows many of the same steps as for U.S. citizens, but with one major distinction: you must establish a business entity capable of exercising control over your employment and salary.
Key Steps:
- Develop a comprehensive business plan demonstrating the financial viability and growth potential of your business.
- Choose the right structure—corporation, LLC, partnership, or sole proprietorship.
- Register your business name with the appropriate county and state authorities.
- Obtain a TIN and EIN from the IRS. The EIN acts as the business’s tax ID and is often issued instantly online.
- Secure a physical location—whether office space, retail, or warehouse.
- Apply for all required licenses, permits, and certifications to legally operate.
- Research state-specific regulations concerning workers’ compensation, health codes, insurance, and taxes.
Because USCIS closely examines these cases, seeking guidance from the immigration attorneys at Green Card Link is essential when filing your H-1B petition.
What Does USCIS Say?
In the past, H-1B entrepreneurship was constrained by interpretations of a 2010 USCIS memorandum, which required proof that the company, as a separate entity, could control the founder’s employment. In 2025, new Department of Homeland Security regulations clarified these rules, offering stronger support for entrepreneurs.
Key Points Under Current Law:
- Controlling Ownership Permitted: H-1B holders can now own more than 50% of their sponsoring company.
- Bona Fide Job Requirement: The company must provide a genuine specialty occupation role requiring at least a bachelor’s degree. The founder’s duties must primarily involve specialized work, not only administrative tasks.
- Independent Oversight Required: Even if you are the owner, your employment must be supervised by a board or other controlling authority.
- Shorter Validity Periods: Initial petitions and first extensions for H-1B founder-beneficiaries are generally limited to 18 months, allowing USCIS to re-evaluate business legitimacy.
Because USCIS carefully scrutinizes founder-based petitions, proper structuring and documentation are critical. Consulting an immigration attorney at Green Card Link ensures you meet the employer-employee relationship requirement and avoid costly mistakes.
Examples of USCIS Scenarios
✅ Approved Example:
A software engineer forms a C-Corporation, owns 70%, and establishes a three-person board of directors that includes outside investors. The board has authority to terminate the founder’s employment. The company presents a detailed business plan, seed funding, and petitions the founder for a Lead Software Architect role requiring specialized expertise.
❌ Problematic Example:
A web designer forms a single-member LLC, where she is the sole owner and only employee. Without a board or outside oversight, she cannot prove the required employer-employee relationship. USCIS would likely deny the petition.
Running a Business Outside the U.S. on H-1B
H-1B rules only apply within the U.S. There is no restriction on earning income abroad if the business is registered and operated outside the U.S. For example, starting a mobile app in your home country is generally permissible, provided it is not marketed or sold within the U.S.
Can I Work on H-1B Outside the U.S.?
Yes, but location matters. H-1B employment must take place within the metropolitan statistical area (MSA) listed on the approved Labor Condition Application (LCA). Work performed outside this area or beyond normal commuting distance (typically 50 miles) for extended periods requires updated compliance. Always discuss such situations with an immigration attorney at Green Card Link.
Consequences of Violating H-1B Rules
If an H-1B visa holder fully manages and operates their business without proper safeguards, USCIS may revoke the visa for violating employment terms. However, you may still:
- Create a business model and register the entity.
- Form a board of directors and participate in meetings.
- Conduct market research and fundraising.
To minimize risk, separate yourself from daily business operations that conflict with H-1B requirements.
Alternative Investment Option: EB-5 Visa
For entrepreneurs with substantial capital, the EB-5 investor visa may be a better path to permanent residency. The minimum investment is $1,050,000 (or $800,000 in targeted employment areas or qualifying regional center projects). Investors must file Form I-526 or I-526E along with supporting evidence.
At Green Card Link, its immigration attorneys have extensive experience guiding EB-5 investors through the complex application process to secure U.S. green cards.
Final Takeaway
While H-1B visa holders can pursue entrepreneurship, doing so requires careful planning, legal structuring, and ongoing compliance with USCIS rules. Because these cases face a higher level of scrutiny, professional guidance from immigration attorneys at Green Card Link is invaluable for safeguarding both your business and your immigration future.
H-1B Visa Overview for Entrepreneurs and Professionals
Understanding the H-1B visa requirements is essential for entrepreneurs and professionals who want to remain in lawful status while pursuing career and business opportunities in the United States.
General H-1B Visa Requirements
To qualify for H-1B status, applicants must meet the following broad requirements:
- A valid job offer for a specialty occupation from a qualified U.S. employer.
- A bachelor’s degree or higher in a field directly related to the position.
While both requirements are important, this article focuses on the first condition—a bona fide job offer. Employers must file a Labor Condition Application (LCA) on behalf of the employee, which requires proving a legitimate employer-employee relationship.
This relationship, under common-law agency doctrine, is defined by the employer’s right of control over the employee. USCIS evaluates multiple factors to determine whether this relationship exists, including:
- Does the employer supervise the employee’s daily work?
- Can the employer control how tasks are performed?
- Is the employee provided with necessary equipment or tools?
- Does the employer have the authority to hire, pay, and terminate the employee?
- Is the employee included in tax filings?
- Are benefits such as insurance or bonuses provided by the employer?
- Can the employer dictate the methods by which the work is carried out?
USCIS stresses that no single factor is conclusive; instead, all conditions are weighed collectively to determine compliance.
FAQs About H-1B and Entrepreneurship
What’s the new law allowing H-1B holders to start a business?
In 2025, new regulations were introduced to support entrepreneurs on H-1B visas. Now, H-1B holders may maintain a controlling interest in their own company. However, they must still meet specific conditions:
- Show evidence of a genuine job offer for a specialty occupation role.
- Establish that the company has control over their employment, often demonstrated through a board of directors or advisory board.
- Accept a shorter initial visa validity period (typically up to 18 months).
Will starting a business affect my green card process?
If you are pursuing a green card or already a permanent resident, owning or working for your own business usually will not harm your status.
However, H-1B holders must strictly follow the USCIS guidelines for entrepreneurship. Failing to comply could put both your visa and green card eligibility at risk.
What is the difference between a Corporation and an LLC?
Choosing the right business structure is a critical decision:
- Corporations are separate legal entities, offering liability protection. A C corporation faces double taxation but allows more flexibility with shareholders, while an S corporation avoids double taxation but has restrictions.
- LLCs (Limited Liability Companies) avoid double taxation and can allow for sole proprietorship. Importantly, LLCs can also appoint a board of directors or advisors, which may help H-1B entrepreneurs demonstrate the employer-employee relationship required by USCIS.
Is a business plan required for H-1B entrepreneurs?
While not a strict USCIS requirement, a well-prepared business plan can significantly strengthen your case—especially if you are applying for H-1B status to work at your own company. For those already in the U.S., a business plan can also serve as a valuable tool to ensure long-term success.
How can I confirm my business idea is original?
You can start with a general internet search. To be certain, check the U.S. Patent and Trademark Office (USPTO) database to confirm whether your idea, product, or service has already been registered.
Where can I learn more about starting a business?
The U.S. Small Business Administration (SBA) is an excellent resource for building the logistical and legal foundation of your business. You can find sample business plans, guidance from experienced entrepreneurs, and answers to common startup questions.
That said, when it comes to navigating H-1B visa regulations, your first step should always be consulting with an immigration attorney at Green Card Link.
How Green Card Link Can Help
If you are an H-1B visa holder looking to launch your own business or ensure compliance while working in the U.S., seeking legal counsel is critical. At Green Card Link, its immigration attorneys specialize in guiding foreign professionals and entrepreneurs through the complexities of H-1B status, business ownership, and green card eligibility.
Schedule a Consultation
An immigration attorney at Green Card Link can help you:
- Evaluate whether your business structure supports H-1B compliance.
- Prepare a strong case demonstrating employer-employee control.
- Develop strategies to safeguard both your visa and green card process.
Starting a business on an H-1B visa is possible—but success requires careful planning and knowledgeable legal support.